"Yeah but what about removing the excessive fees, taxes, monopoly profits that resulted in our govt accumulating one of the biggest reserves per capita in the world" - Lucky Tan
Subsidy is bad, welfare is worse. If that is so, doing the reverse has to be good - squeezing the citizens for more, huge surpluses etc. The govt of Singapore has done alot of good in recent years. It is easy to argue that subsidies are bad - they result in misallocation of resources, a crutch mentality and very often they allocate govt funds to those who don't need. Subsidies are bad...bad...bad.....lets see.
For some reason, I have to bring people to the A&E more often than I want neighbors, family members ...I did it 5 times this year! Many years ago, there was this problem of people going to the A&E when they didn't really need to - one reason was the lack of 24 hour clinics so people with slight fever, coughs and cold problems turn up at the A&E. The problem was you can't turn people away when they go there. To solve this, the fees at the A&E were raised so that it would be a pinch to go there unless you really needed to. So it has been increased from a subsidised rate to $70. $70 is higher than what you would pay if you were to go to a "for profit" private clinic. In order to have an effect, it was raise so that the middleclass would feel the pinch. But what happened to the lower middle and poor people - they actually avoid going to the A&E even when they need to. For them a $30 fee would be sufficient deterent but $70 deters them from seeking treatment even when they need to. When subsidies are not given to people who need it, they do suffer.
Subsidies are still bad...bad..if your electricity bill is subsidized, you will not think twice leaving your air-con on all night, you might not be so conscious to buy the "inverter" type air-cons that uses less energy. One colleague actually think of saving power more proactively when a rude awaking electricity bill of $420 hit him last month. So no subsidy is good. Lets do away with subsidy. Lets do the reverse, let Singapore Power make money. So while the poor families are squeezed to saving those precious watts by diming their homes or living in darkness - Singapore Power ends up with a pile of several billions in profits. So we are told that subsidies result in misallocation so they are removed, and GLCs are allowed to make monopoly profits. So where does Singapore Power put its billions - not back in the pockets of the poor folks they have squeezed but buying assets in Australia. So how does that benefit Singaporeans? Isn't there misallocation when billions are made in providing services to Singaporeans are used to invest overseas? Subsidies are bad but at least it goes back to the citizens. Sure the rich don't need it but they also pay more in taxes, the poor need and get it. What about identifying the poor and then giving them a lower utilities rate relative to their income rather than the price of oil? Even some of the most capitalistic societies do that.
One cannot discuss subsidy without talking about the "market subsidy" given out by the HDB. You know if subsidies are so bad, why not do away with them for housing. They are there for the simple reason that is the same in every land scarce country/city, if there is no subsidy, you will find many people homeless. Reluctant as they are, the PAP govt is compelled to give this "market subsidy". While Singapore's HDB flats are the most expensive public housing in the world more expensive than private property in many countries, they are priced to prevent homelessness. Unless every Singaporean can afford a private condo, HDB has to keep building these "subsidised" flat. So subsidies are not so bad?...They are bad but necessary? The HDB system is really fine tuned for the poor especially the poorest people. They can't afford to buy flats so they have to rent. HDB checks their income level, as their income rises, HDB increases the rent and reduces the subsidy to absorb the increase in their income.
"Is anyone complaining about the subsidised service Singaporeans contribute when they serve their NS? Subsidies are okay if the govt is the one receiving it..." - Lucky Tan
I guess that MM Lee is right as usual. Giving subsidies will not solve Singapore's problems. But what are Singapore's problems? If you read his speech carefully, the main problem in Singapore is to keep society competitive and grow year after year. The answer to our problems is for ordinary Singaporeans to keep working harder and longer. That has always been the answer - working harder and longer.-----------------------------
MM Lee says giving subsidies will not solve Singapore's problems
By S Ramesh, Channel NewsAsia Posted: 25 May 2008 2021 hrs
Minister Mentor Lee Kuan Yew
MM Lee says giving subsidies will not solve Singapore's problems
SINGAPORE: Singapore's problems cannot be solved by giving subsidies, but by having a dynamic economy, said Minister Mentor Lee Kuan Yew.
Speaking at the Tanjong Pagar Day celebrations at the Queenstown Stadium on Sunday, Mr Lee drew lessons for Singapore from how countries in the region are tackling their problems.
The world has moved into years of high prices for food and oil, said Mr Lee. But Singapore does not have agriculture, so people have to earn enough money by working hard and smart to pay market prices for food.
He made it clear that Singapore cannot go the way of welfare systems in Europe, which have lowered incentives to strive and excel.
The minister mentor said: "I read many letters in the press urging subsidies for all manner of things – seat belts for school buses, food for the poor, medical fees and so on. Singapore must remain a competitive society to generate growth year after year.
"The government must ensure that everyone has the highest paid job he is qualified to do. If his salary is below the minimum for a decent life, the government will top up with Workfare. When everybody knows the cost of what he consumes or uses, he will spend his money more to his benefit."
Mr Lee noted that countries in the region have taken different approaches to worldwide problems.
In Indonesia, there are riots over an anticipated lowering of oil subsidies, while in Malaysia, the newly elected government has not reduced the oil subsidy so as not to upset the electorate.
In handling natural disasters, Myanmar's military leaders had refused foreign aid for weeks after Cyclone Nargis left millions homeless. But the reaction was different in quake-hit China.
Mr Lee said: "Premier Wen Jiabao immediately flew to the quake areas. 120,000 troops were sent by air. The people were united and rallied to help victims by donations, and many went to Sichuan to do relief work.
"The Confucian habits of communitarian solidarity and mutual help have again surfaced, although Communist ideology marginalised Confucian values for 40 years."
The minister mentor added that Singapore does not have earthquakes, tsunamis or typhoons because of the country's favourable geographical location.
His call to Singaporeans is to be grateful that the nation has long-term stability, continuing high-value investments and good growth. Mr Lee said he is confident that in five years, Singapore will be a more lively and beautiful city.
Mr Lee, who cut short his speech because of a sore throat, said he needed to save his voice for a court case involving Dr Chee Soon Juan on Monday.
"I've got to save part of my voice to let him cross-examine me. Of course, in the course of the cross-examination, I have a few things to say," he said.
The High Court has set aside three days for the hearing on damages claimed by Prime Minister Lee Hsien Loong and the minister mentor against the Singapore Democratic Party and its leaders.